GBP/USD for Wednesday, March 12, 2014
The last couple of days has seen the GBP/USD slump back towards the support level at 1.66 where it is presently resting. Over the last week it has been edging higher back towards the short term resistance level at 1.6750 before falling sharply. Just above the 1.6750 level is the resistance level at 1.68 which continues to loom large and is ready to offer an obstacle to higher prices should the pound rally again. Earlier last week the pound fell sharply away from the resistance level at 1.6750 and rest on a support level around 1.6650 before rallying higher again. Over the last few weeks the GBP/USD has received solid support from the key 1.66 level after it retraced strongly from the resistance level at 1.68 and over the last couple of weeks it had been edging higher slowly placing upwards pressure on a short term resistance level at 1.6750. In early February, the pound enjoyed a very healthy time moving well from the support level at 1.6250 through 1.6450 before pushing on to the multi-year high above 1.680.
In late January the pound fell sharply and experienced its worst one week fall this year which resulted in it moving to the six week low near the support level at 1.6250. Over the last few months the pound has established and traded within a trading range roughly around the key level of 1.6450, whilst moving down to support at 1.6250 and up to 1.66 and beyond. The 1.66 level has become quite significant and has loomed large throughout this year providing some resistance to higher prices. This level has resurfaced again as one of significance and it is now providing solid support. In late November it did well to break through the long term resistance level at 1.6250 which had established itself as a level of significance over the last few months. This level continues to play a role in providing support. In early November, the pound bounced strongly off the support level at 1.59 to return back to above 1.6250.
Towards the end of October the GBP/USD slowly drifted lower from the strong resistance level at 1.6250 and down to a three week low just around 1.5900 which was recently passed as the pound moved down towards 1.5850 only a week ago. For the week or so before that the pound moved well from the key level at 1.60 back up to the significant level at 1.6250, only again for this level to stand tall and fend off buyers for several days. Throughout September the pound rallied well and surged higher to move back up strongly through numerous levels which was punctuated by a push through to its highest level for the year just above 1.6250 several weeks ago. In the first week of October the pound was easing back towards 1.60 and 1.59 where it established a narrow trading range between before surging back to 1.6250 again.
Mark Carney, the Governor of the Bank of England, pledged to appoint a new Deputy Governor at the Bank to lead a "root and branch" review of its strategy, after suspending an official over the foreign exchange market manipulation scandal. Carney claimed that there was "no evidence" any Bank of England official had condoned manipulation of the foreign exchange market, as he faced down tough questioning from U.K. members of parliament (MPs). He defended the Bank against MPs' suggestions it should have been more alert to the possibility of foreign exchange market manipulations, after the matter was raised as part of regular meetings between the Bank and market participants, some of whom have since been arrested over the scandal. "It is possible foreign exchange traders decided to collude to make their lives easier and richer," Carney said. In a move likely to have ramifications for the central bank's history, he signaled that he is prepared to make the 420 year-old Bank a more open institution.
GBP/USD Daily chart" title="GBP/USD Daily chart" height="235" width="474">
GBP/USD 4 hourly chart" title="GBP/USD 4 hourly chart" height="236" width="474">
GBP/USD March 12 at 01:55 GMT 1.6632 H: 1.6653 L: 1.6596
GBP/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.6600 | 1.6300 | 1.6250 | 1.6750 | 1.6800 | --- |
During the early hours of the Asian trading session on Wednesday, the GBP/USD is remaining very steady just above the 1.6600 level after spending the last couple of days resting on the support level there. Current range: Trading just above 1.6600 around 1.6630.
Further levels in both directions:
• Below: 1.6600, 1.6300, and 1.6250
• Above: 1.6750 and 1.6800.
OANDA's Open Position Ratios
GBP/USD Open Position Ratios" title="GBP/USD Open Position Ratios" height="28" width="474">(Shows the ratio of long vs. short positions held for the GBP/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The GBP/USD long positions ratio has moved back below 30% again as the GBP/USD remains steady around 1.6600 again. Trader sentiment remains in favour of short positions.
Economic Releases
- 23:30 (Tue) AU Westpac Consumer Confidence (Mar)
- 00:30 AU Housing Finance (Jan)
- 00:30 AU Lending Finance (Jan)
- 05:00 JP Consumer Confidence (Feb)
- 09:30 UK Trade Balance (Non-EU) (Jan)
- 09:30 UK Visible Trade Balance (World) (Jan)
- 10:00 EU Industrial production (Jan)
- 18:00 US Budget (Feb)
- JP BoJ Publication of Monthly Report